Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia. Vikki Velasquez is a researcher and writer who has managed, coordinated, and directed ...

Many businesses receive advance payment for products and services. In such a case, the monies received are not earned income because the business will provide the products or services at a later date.

In accrual accounting, revenue is included as income when it is generated. The work is done, the company is paid, and the amount is entered as income. Only earned revenue – money exchanged for a good ...

Unearned income, also known as passive income, is derived from sources other than employment or business operations and can act as a financial safety net during times of job loss or financial crisis.

An individual’s taxable income is the amount of money they’ve received over the course of a particular tax year in both earned income and unearned income. This number determines their tax liability.

The kiddie tax is a set of tax rules designed to prevent parents from reducing their tax burden by shifting investment income to their children. It applies to children under the age of 18, or ...